Scotland Tenders for £106m Gigabit Broadband Rollout in North East

The Scottish Government has issued a contract notice for the North East of Scotland (Lot 5) under the UK’s £5bn Project Gigabit broadband roll-out scheme, which is expected to expand related connectivity to an estimated 68,342 premises in hard-to-reach (rural) parts of Dundee, Angus, Aberdeenshire, Aberdeen City, Moray, Highland and Perth and Kinross.

At present 75% of premises in Scotland can access a gigabit-capable (1Gbps download) broadband ISP network (here), which is expected to increase as commercial builds and the Scottish Government progresses their existing £600m Reaching 100% (R100) project. The R100 scheme largely involves extending “full fibre” (FTTP) networks to another 114,000 premises in areas that lack access to “superfast broadband” (30Mbps+) speeds by 2027/28 – so far, this has already helped to reach 48,000 premises (here). But take note that this 48k figure includes the impact from vouchers (3,800), contracted build and overspill (explainer).

NOTE: The responsibility for broadband in Scotland is reserved to Westminster, but that doesn’t stop local and devolved authorities from making their own investments.

However, Ofcom predicts (here) that Scotland’s full fibre coverage will reach around 78-83% by May 2026, while gigabit-capable broadband (FTTP and Hybrid Fibre Coax / cable) would deliver 83-85% by that same date. Suffice to say that in terms of gigabit coverage, a gap will still be left for Scotland to fill once R100 completes and most of that will be in rural areas (only around 30% of rural Scotland can currently access gigabit speeds).

As a result, the UK Government’s Project Gigabit programme has already allocated £450m (here) to help this project spread 1Gbps broadband speeds into some of the most remote rural areas of Scotland. The associated Building Digital UK (BDUK) agency has previously estimated that some 410,000 premises across Scotland may need support from public funding to help them gain access to such speeds (here).

The first major Regional (Type B) contract notice under this new programme has now been issued, which is for the North East (Lot 5) of Scotland – largely comprising rural parts of Dundee, Angus, Aberdeenshire, Aberdeen City, Moray, Highland and Perth and Kinross. Take note that the ‘LOT’ numbers in Scotland are separate from those already allocated to England (e.g. Lot 5 in England covers Cambridgeshire and adjacent areas).

The Scottish Government’s notice indicates that five potential suppliers are being courted for the new contract under Project Gigabit’s related Gigabit Infrastructure Subsidy (GIS) scheme, which has an estimated value of £105.71m (state aid). The contract itself is expected to run for 11 years (only 4 of that will involve the build phase, with 7 years for an operational period).

According to the notice, “it is the intention that the build period will be completed by the end of 2029,” although this completion date is highly tentative as it will depend upon both how long it takes to award the contract to a supplier and then how long that supplier needs in order to conduct their final engineering surveys (i.e. it may well take longer to complete than the end of 2029). Not to mention any unexpected delays during deployment.

A number of network operators may have an interest in delivering this, such as nexfibre (Virgin Media), Openreach (BT), CityFibre, GoFibre, Trooli, Netomnia (YouFibre) and Lothian Broadband etc. But some of those players lack the investment support and resources to take on such a large deployment, and we don’t yet know which ones will actually put in a serious bid.

The SG is also preparing to launch a number of smaller (Local – Type A) contract notices for other parts of Scotland over the next few weeks and months (e.g. a build for 11,000 premises in the Borders and East Lothian areas will be next on their list).

In addition, other parts of Central and North Scotland may be included within a future call-off procurement under the cross-regional framework (Type C) that is currently in procurement, which will be delivered by BDUK and the preferred supplier for that is already known to be Openreach. Type C’s are the largest contracts and tend to reflect areas that have struggled to attract interest from suppliers when presented as smaller Type A/B contracts.

But today reflects the first contract notice for a regional project in Scotland under Project Gigabit and so it gets its own article, rather than forming part of a general quarterly summary. We should know who has won this contract by around the end of autumn or early winter.